Life insurance is basically a form of insurance that pays a sum of money to your beneficiaries right after your demise or after a given period. It is also known as life assurance or life cover and it’s a way to help protect your family financially if you die.
You choose the amount of cover you require and the period and you can pay premiums either monthly or annually. In return, your loved ones are assured that if you passed away while covered by the policy, they will get a cash payout when a valid claim is made.
Why Should You Consider Life Insurance?
If you have a partner, kids or a person who relies on you for financial aid, then you may want to consider life insurance. If you are the breadwinner, without that money, your loved ones will be left in a struggle to pay the rent or mortgage and other bills.
Also, if you have outstanding debts such as a home loan, life insurance could be used to cover these debts when you die. It could also help your loved ones with every day living expenses and even cater for your funeral costs and helps avoid insurance fraud.
There are various types of life insurance but the most common are term life and whole life insurance. Term life covers you for a set period of time. Your premium won’t change and you’ll not accrue any money. It is the cheapest form of life insurance in the market, but if you happen to die outside the set period, you’re not covered.
Whole life, on the other hand, is a permanent option. Here, the policy covers you your whole life. The premium will be level and the insurance provider will invest a portion of the premiums. It’s slightly expensive than term insurance but cash values are accrued and accessible at any time. Also, your beneficiaries are awarded death benefit.
There are numerous competent insurance companies and organizations that provide life insurance and it is up to you to do your research to find the best for your needs and budget.